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Chase Mortgage Prepayment Penalty Class Action Lawsuit

By Mike Holter

An angry homebuyer has filed a federal class action lawsuit against JPMorgan Chase Bank claiming it manipulates the order of processing and/or illegally delays crediting advance payments made on mortgage principals in order to maximize interest and increase its profits.

Lead Plaintiff Kevin Kratzke claims that “Chase, unlike other banks, holds advance principal payments in an undisclosed suspense account and purposefully delays crediting of such payments in order to maximize interest accrual on money that, under the terms of the loans, it has not earned.”

This violates the borrower’s right to prepay, as specifically outlined in their loan contracts, and amounts to illegal “pre-payment penalties,” Kratzke says. This policy has allowed Chase to reap “thousands and thousands of dollars” in illegally obtained gains from thousands of customers over the course of their 15- to 30-year loans.

"Chase's policy and practice shortchanges borrowers who may make modest advance principal payments on their mortgages, with the magnified effect of allowing Chase a windfall in collecting additional payments from continuously accruing interest. The net effect to impose a 'pre-payment' penalty in the form of accepting but holding advance principal payments [is] to increase the bank's bottom line and to breach its 'order of payment' crediting agreement found in the standard and conforming Freddie Mac/Fannie Mae mortgage/deed of trust loans secured in real estate," the class action lawsuit states.

The class action lawsuit further accuses Chase of purposefully programming its computers to delay crediting loan payments when the loan is current and no payment is due.

The Chase class action lawsuit is brought on behalf of all individuals and/or entities in the U.S. who obtained a Freddie Mac/Fannie Mae mortgage serviced by JPMorgan Chase; who were completely current and not in arrears of their mortgage/deed, and who voluntarily submitted advance principal payments toward their principal balance owed; and who were subject to JPMorgan Chase’s policy, pattern and practice of delayed crediting of such advanced principal payments.

If certified, the class action lawsuit will seek class damages for breach of contract and unfair and deceptive trade, an injunction, court costs, and more.

A copy of the Chase Bank Mortgage Prepayment Penalty Class Action Lawsuit can be read here.

The case is Kevin Kratzke v. JPMorgan Chase Bank, Case No. 12-cv-2094, U.S. District Court, Northern District of California.

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Updated May 3rd, 2012

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Apple "No Refund" Policy Class Action Lawsuit

By Matt O'Donnell

An irate customer has filed a class action lawsuit against Apple claiming it double-bills for purchases made from iTunes, the App Store and the iBookstore, and then refuses to refund the overcharges by instituting an illegal “no refund” policy.

Lead Plaintiff Robert Herskowitz claims he was charged twice for purchasing a single song from iTunes, but when he brought the overcharge to Apple’s attention, he was told in an email that Apple would not refund the overcharge based on its purported no-refund policy. The email said:

"Your request for a refund…was carefully considered; however, according to the iTunes Store Terms of Sale, all purchases made on the iTunes Store are ineligible for refund. This policy matches Apple’s refund policies and provides protection for copyrighted materials."

According to the class action lawsuit, however, the Agreement governing the “use of” the Apple Stores says no such thing.

“Under the Agreement, as with any consumer transaction, Apple may bill customers only once for each product or service that is purchased. With troubling regularity, however, Apple has ‘double billed’ customers for purchases made through the Apple Stores. In those cases, when a customer purchases a song, movie or book, Apple bills that customer twice for the same download. Apple, however, has effectuated a policy and practice of refusing to refund the extra charge to customers whom it has overbilled,” the class action lawsuit states.

Herskowitz alleges this illegal “no-refund” policy has resulted in substantial numbers of Apple customers across the country having been double-billed by Apple, in violation of the Agreement, California’s statutory law, and common law.

He is seeking to represent a nationwide class of all individuals or entities who purchased products and services from the App Store, the iTunes Store, and the iBookstore, and who were billed more than once and paid Apple for the same product or services.

If certified, the class action lawsuit will seek refunds for the class, as well as damages, interest and a Court order enjoining Apple from implementing its “no refund” policy concerning double billing and overcharges.

A copy of the Apple “No Refund” Policy Class Action Lawsuit can be read here.

The case is Robert Herskowitz v. Apple, Inc., Case No. 12-cv-2131, U.S. District Court, Northern District of California.

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Updated May 2nd, 2012

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Second Chance Body Armor Class Action Settlement

By Mike Holter

Second Chance Body Armor, Inc. has reached a class action lawsuit settlement that could pay consumers up to $750 for each bulletproof vest they purchased from the company that contained the fiber Zylon.

The Second Chance bulletproof vest settlement will resolve a class action lawsuit claiming the vests failed to meet performance standards for which they were guaranteed and that the vests were unfit for their intended purpose.

Second Chance filed for bankruptcy protection in 2004 and its assets have been liquidated, so there is only a certain amount of money left to pay people and businesses that are owed money. Under the proposed class action lawsuit settlement, you may be able to receive up to $750 per vest as long as the Judge approves the settlement.

You’re considered a Class Member of the Second Chance class action settlement if you live in the United States and purchased or used a bulletproof vest manufactured by Second Chance Body Armor which contained Zylon.

To receive any money from the class action lawsuit settlement, you must submit a claim form either online at www.SCBAClass.com or by U.S. mail postmarked by June 25, 2012.

Claim forms and more information on your rights in the Second Chance Zylon Bulletproof Vest Class Action Settlement can be found at www.SCBAClass.com.

Detailed instructions on how to file a valid claim and ensure you receive your settlement benefits can be found in our Open Lawsuit Settlements section.

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Updated May 2nd, 2012

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Verizon Landline Third-Party Billing Class Action Settlement

By Kimberly Mirando

Verizon has reached a class action lawsuit settlement over allegations it illegally billed landline phone customers for third-party charges. If you were billed for one of these charges, you may be entitled to either a $40 flat payment or a 100% refund of the unauthorized charges you paid.

The Verizon third-party billing settlement will resolve a class action lawsuit, entitled Moore, et al. v. Verizon, et al., alleging that Verizon billed its landline customers for charges from third-party companies that were not authorized by the customer (a practice known as “cramming”), in violation of federal and state law.

Verizon denies any wrongdoing, but has agreed to settle the class action lawsuit to avoid ongoing litigation.

The Verizon third-party billing class action lawsuit settlement covers all Verizon landline customers nationwide (including individuals, businesses and local governmental entities) who were billed for third-party charges from April 27, 2005 through February 28, 2012.

Class Members will be able to recover 100% of all money they paid in unauthorized third-party charges during that period by submitting a “Full Payment Claim” or recover a refund of $40 by submitting a “Flat Payment Claim.” Both forms will be available at www.verizonthirdpartybillingsettlement.com and must be submitted by November 15, 2012. There is no dollar cap on the monetary recovery to be paid under the Settlement.

Some Settlement Class Members may have a claim for hundreds or thousands of dollars in refunds from the Verizon third-party billing class action settlement. That's why it's important that Verizon landline customers take advantage of one of the benefits available to them under the class action lawsuit settlement, which provides a free summary of all third-party charges they incurred. You can request this summery here or by calling the Settlement Administrator at (877) 772-6219.

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Five Guys Gift Card Class Action Settlement

By Matt O'Donnell

The company behind Five Guys Burgers and Fries has reached a class action lawsuit settlement with New Jersey residents that will provide a gift card worth up to $50 to certain consumers who were charged a dormancy fee for not using their gift cards for a long period of time.

The Five Guys gift card settlement will resolve a class action lawsuit, entitled Storch v. Five Guys Enterprises, LLC and FG Madison, LLC, that alleges Five Guys sold gift cards in New Jersey containing a dormancy fee and other provisions that allegedly violate the New Jersey Truth in Consumer Contract Warranty and Notice and the New Jersey Gift Card Act.

Five Guys denies any wrongdoing and maintains it has never charged a dormancy fee or treated a gift card as expired, but has agreed to a class action lawsuit settlement to avoid ongoing litigation.

The Five Guys gift card class action settlement includes all New Jersey Residents who purchased a Five Guys gift card on or after April 4, 2006 with a dormancy fee provision. Under the proposed class action lawsuit settlement, Class Members can file a claim to receive a Five Guys gift card in an amount of up to $50, redeemable at a New Jersey Five Guys location, if they have Proof of Purchase.

Class Members who do not have Proof of Purchase can still file a claim to receive a $15 gift card as long as they submit a claim form under penalty of perjury stating they purchased a Five Guys gift card in New Jersey that contained a dormancy fee provision and/or expiration provision, including the location and date of purchase.

Five Guys has also agreed to continue honoring the full value of unredeemed Five Guys gift cards, or the remaining value of partially redeemed gift cards, sold in New Jersey after April 4, 2006.

In order to receive a gift card from the Five Guys class action lawsuit settlement, you must submit a claim form postmarked no later than May 29, 2012.

Claim forms and more information on your rights in the Five Guys Gift Card Class Action Lawsuit Settlement can be found at www.FiveGuysNJSettlement.com.

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Updated May 1, 2012

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A federal class action lawsuit says Citibank, Discover Bank and The Student Loan Corporation are keeping students in debt and ripping them off by tricking them into thinking interest rates on their student loans have been reduced, when in fact the reduction is really a “massive decline” in the amount of money being applied to the principal balance. As a result, student borrowers are paying thousands of dollars in additional interest over the life of their loans, the class action lawsuit says.

Lead Plaintiff Justin Kuehn, who is paying off four student loans from Citibank and Sallie Mae, claims the Defendants “are engaged in a scheme to collect additional interest at the expense of borrowers of student loans.”

According to the student loan fraud class action lawsuit:

"Defendants are deceiving borrowers into believing that their monthly payments have been reduced because of an interest rate reduction, when in fact, the vast majority of the payment reduction is attributable to a reduction in the amount of principal being repaid each month. The end result is an extension of the loans' repayment term causing thousands of dollars in additional interest to be paid by student loan borrowers over the life of their loans."

Kuehn says he received a letter from The Student Loan Corporation (SLC) early this year stating that his student loan payments had been dropped from $845.72 to $539.27, “falsely claiming that the change reflected his new interest rates.”

"The interest rate misrepresentation is false, deceptive, and misleading because it masks from borrowers the true reason for the drop in the monthly payment amount -- a massive decline in the amount of the loan's principal being repaid each month," the class action lawsuit states.

"In January 2012, the interest rate for the Consolidated Private Student Loan was only reduced 0.5 percent, from 9.55 percent to 9.05 percent. According to Plaintiff's January 2012 statement from SLC, the total current balance of the Consolidated Private Student Loan at that time was $64,791.19. The 'new interest rate' does not account for plaintiff's monthly payment decline of over $300 per month.

"As a result of the reduction to the monthly payment, the amount of principal being repaid on the Consolidated Private Student Loan declined from $335.67 in December 2011 to $42.59 in January 2012, namely, a decline of $293.08 per month, while the amount of interest paid remained basically the same, declining only from $510.05 in December 2011 to $496.68 in January 2012. This fact was not disclosed by Defendants,” the class action lawsuit states.

Kuehn says that when he contacted SLC about the matter, SLC made it extremely difficult to reach a live customer service rep by making him navigate through a lengthy automated process. Once he finally reached one, he says he was given varied and inconsistent answers as to why his monthly payment declined so dramatically. He also says SLC refused to return his monthly payment to the original amount.

Kuehn is seeking treble damages for breach of contract and business law violations, as well an injunction prohibiting the Defendants from continuing the alleged deceptive practices.

The case is Justin A. Kuehn v. Citibank, N.A., The Student Loan Corporation and Discover Bank, Case No. 12-cv-03287, U.S. District Court, Southern District of New York.

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Updated May 1st, 2012

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Judge Prunes eBay "Good Til Canceled" Class Action Lawsuit

By Kimberly Mirando

A federal judge last week dismissed most of a class action lawsuit alleging eBay improperly charged sellers recurring fees for the “Good Til Canceled” option, which was advertised at “no extra cost.” However, eBay was unsuccessful at having the entire lawsuit dismissed.

The Good Til Canceled option was introduced by eBay in September 2008 as a policy that automatically renewed an unsold product listing unless the seller canceled the post or sold the item. eBay represented to sellers that the Good Til Canceled option was at “no extra cost” to them and would be a fixed, flat rate that could be renewed monthly for an indefinite period. However, eBay charged sellers a 35-cent “insertion” fee for every month it renewed the listing, and recharged for any of the extras that the seller initially chose when posting an item.

Lead Plaintiff Richard Noll filed a class action lawsuit against eBay in September 2011 claiming eBay did not make these recurring fees known when sellers signed up for the Good Til Canceled option. He sought damages for a proposed class of eBay sellers who were charged for the using the supposedly “free” option, as well as an order requiring eBay to clarify its “no extra charge” language.

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Citizens Bank Reaches $137.5M Overdraft Fee Settlement

By Mike Holter

Citizens Bank is the latest bank to reach a class action lawsuit settlement over improper overdraft fee practices, agreeing last week to pay $137.5 million to settle its part in a massive class action lawsuit involving more than 30 banks nationwide.

The Citizens Bank overdraft fee settlement joins Citizens with 12 other banks, including Bank of America and JPMorgan Chase, who have agreed to refund customers millions of dollars in unfair overdraft fees. To date, approximately $750 million will be returned to customers from the class action lawsuit settlements reached in the case In re: Checking Account Overdraft Litigation.

Like the other banks, Citizens Bank is accused of reordering debit-card transactions from highest to lowest, rather than in the order that the transactions occurred, in order to maximize the number of overdraft fees that could be charged to a customer.

Keep checking Top Class Actions for details on how to file a claim for the Citizens Bank Overdraft Fee Class Action Lawsuit Settlement once they become available.

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Updated April 30th, 2012

All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions